AI regulation must avoid ‘strangling’ innovation, says report

A new business report has sought to outline a national blueprint that would bolster Australia as a global AI leader, focusing on the importance of effective regulation that doesn’t hinder innovation.

The Business Council of Australia’s (BCA) newly released Accelerating Australia’s AI Agenda report covers key actions that Australia can phase in over the next three years, which the BCA believes would make the country a productivity powerhouse through the use of artificial intelligence.

The report claims that through actions such as simplifying data centre approvals to speed up infrastructure build, establishing a national AI Research Consortium, and including standardised AI courses in every level of education – Australia can boost innovation, lift living standards, and conquer its “decade-long productivity stagnation”.

“AI is our next big lever for economic growth and a significant opportunity to boost Australian living standards,” said BCA chief executive Bran Black.

“If we get this right, AI can deliver a significant productivity boost and that means higher real wages and more opportunities for more Australians.”

According to Black, without immediate intervention on a national scale, Australia risks falling behind competing nations that are already fully invested in increasing their AI capability and adoption.

“The choices we make now will determine whether we gain a competitive edge or fall behind,” he said.

“We need to be training more AI specialists, data scientists and engineers, while also educating the entire workforce on how we can improve the day-to-day work experience.”

For Australian businesses, the implementation of AI in daily processes has been a major talking point, with a number of large businesses already having these systems in place. Black claimed that applying AI to “the boring parts” of business can have a huge and immediate impact on productivity, collaboration, and creativity.

“Even if we apply AI to just the ‘boring but essential’ parts of our economy – like payroll processing or document analysis – the dividends to consumers and businesses could be significant,” said Black.

“AI-enabled productivity means freeing people to do more of the high-value work machines can’t, like creativity, collaboration and care.

“At the same time, we must acknowledge that change is disruptive and can often be challenging for many people, and that’s why recommendations such as an Australian AI Safety Institute are so important.”

On the other side of the coin are genuine concerns around the dangers that rapid AI implementation poses to businesses and workers especially. As previously reported by HR Leader, at a special debate touching on these concerns, Justice Adam Hatcher, president of the Fair Work Commission, spoke of instances of AI-fuelled employee exploitation.

“It’s happening right now in the United States. It’s got a name, and it’s called algorithmic wage discrimination ... This is having major effects on the world of work and employment rights, and we can expect that to hit Australia fairly soon,” Justice Hatcher said.

The natural course of action to dispel these concerns is direct regulation to protect both employers and employees. However, the BCA report argued that deciding the regulation pertaining to AI is a “tightrope walk”.

“We need rules that build public trust and protect citizens from genuine harm, such as deepfakes manipulating opinions, biased algorithms perpetuating inequality, or breaches of data privacy,” said the report.

“Effective AI regulation starts from the premise that the application and use of AI is overwhelmingly positive, but that risks at the edges need to be mitigated. We must avoid strangling the very innovation we seek to foster.”

“Overly burdensome, ambiguous, or premature regulations throttle experimentation, deter investment, and put Australian businesses at a disadvantage.”

As the age of AI continues to filter through to the Australian workplace, defining these regulations could set the scene for a worker-employer standoff – with unions pushing for protections, and employers hoping to avoid more red tape.

“This is Australia’s moment to embrace the opportunity for growth, and that’s how we’ll build a future where AI strengthens our economy, empowers our people, and improves lives,” said Black.